Case Law Details
Solvi Enterprises Vs Additional Commissioner Grade 2 And 3 Others (Allahabad High Court)
In Solvi Enterprises Vs Additional Commissioner Grade 2 And 3 Others, the Allahabad High Court addressed a dispute concerning recovery actions taken against Solvi Enterprises. The Deputy Commissioner of State/Commercial Tax issued recovery notices to multiple banks after dismissing an appeal by the petitioner against an order dated 24.01.2022. The petitioner argued that no prior notice or intimation was given before this action, and an amount of Rs. 33 lakhs had already been recovered from one bank account while notices were still issued to other accounts for the same amount. The petitioner further highlighted the lack of a functioning GST Tribunal, which would have otherwise required only 10% of the disputed amount to be deposited under recent amendments. The court ordered the Deputy Commissioner to file a personal affidavit within three weeks, explaining the issuance of recovery notices to all banks and the failure to modify the DRC-13 after the partial recovery. The court also directed that no further coercive actions be taken, and the petitioner should be allowed to operate all its bank accounts until further notice, acknowledging the ongoing lack of a GST Tribunal and the premature enforcement actions taken by the tax authorities.
Deputy Commissioner, State/Commercial Tax, file his personal affidavit as to why for recovery of equal amount, notices were sent to all the concerned Banks
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
Supplementary affidavit filed today is taken on record.
Heard Shri Aditya Pandey, learned counsel for the petitioner, learned Standing Counsel for the State – respondents and Shri Manish Trivedi, learned counsel for respondent – Bank.
Learned counsel for the petitioner submits that the Proper Officer passed an order on 24.01.2022, against which an appeal was preferred, which has been dismissed vide impugned order dated 06.03.2024. After dismissal of the appeal, the Proper Officer issued a letter on DRC – 13 dated 03.07.2024 to the Bank Manager, HDFC Bank, to which the Bank has created demand in favour of the respondent. He further submits that no notice or intimation, whatsoever, was given to the petitioner before taking such action. In support of his submission, he has placed reliance upon paragraph nos. 13, 14 & 15 of the judgement of the Patna High Court in the case of National Insurance Co. Ltd. Vs. the State of Bihar & Others [Civil Writ Jurisdiction Case No. 777/2023, decided on 18.01.2024].
Learned counsel for the petitioner further submits that the petitioner is having three Bank accounts and the notice has been issued to all the Banks for recovery of equal amount of Rs. 36 lacs & odd; whereas, the amount of Rs. 33 lacs has already been recovered as coercive measure, but the petitioner is not being permitted to operate its Bank accounts. He further submits that the GST Tribunal has not been constituted till date and in the event the Tribunal was there, earlier he was only required to deposit 20% of the disputed amount, but now, by the amendment dated 16.08.2024, the petitioner was required to deposit only 10% of the disputed amount.
In view of the above, let the respondent no. 2, i.e, the Deputy Commissioner, State/Commercial Tax, Sector – 26, Kanpur, file his personal affidavit within a period of three weeks from today as to why for recovery of equal amount, notices were sent to all the concerned Banks. He shall further clarify as to why lain/DRC – 13 was not withdrawn or modified after recovering the amount of Rs. 33 lacs from the HDFC Bank of the petitioner.
List thereafter as fresh.
Since the GST Tribunal is not functioning and the amount of Rs. 33 lacs has already been recovered from the HDFC Bank account of the petitioner, as stated by the petitioner in the writ petition, the petitioner shall not be insisted to deposit any further amount and no coercive action shall be taken against the petitioner pursuant to the impugned orders. The respondents are further directed to permit the petitioner to operate its all Bank accounts forthwith.
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